Session:15 Partnership Accounting
Exercise Set A
Principles of Accounting, Volume 1: Financial Accounting | Leadership Development – Micro-Learning Session
Rice University 2020 | Michael Laverty, Colorado State University Global Chris Littel, North Carolina State University| https://openstax.org/details/books/principles-financial-accounting
EA 1.
LO 15.2On May 1, 2017, BJ and Paige formed a partnership. Each contributed assets with the following agreed-upon valuations.
Prepare a separate journal entry to record each partner’s contributions.
EA 2.
LO 15.3The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $10,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is:
- $ 30,000
- $ 6,000
- ($10,000)
EA 3.
LO 15.4The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partner’s new agreement will share profit and loss in a 1:3 ratio.
EA 4.
LO 15.5Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances:
A competitor agrees to buy the inventory and store fixtures for $20,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis: